The Current State Of Unemployment In India: A Detailed Overview

The Current State Of Unemployment In India: A Detailed Overview


In India, unemployment is a serious problem that has persisted for many years. India is the second-most populated country in the world with a population of over 1.3 billion, and it is a difficult challenge to offer work possibilities to such a vast population. The government and corporate sector have made enormous efforts, but India’s unemployment rate is still very high.

In this article, we will provide a detailed overview of the current state of unemployment rate in India.

Unemployment rate in India:

The Centre for Monitoring Indian Economy (CMIE) has just released data that shows India’s unemployment rate was 6.8% in December 2021. Compared to the peak of 23.5% observed in April 2020 during the COVID-19 pandemic, this is a remarkable improvement. The current rate, though, is still greater than the 5% pre-pandemic level.

Reasons for Unemployment:

1. Lack of Adequate Employment Opportunities

One of the main causes of high unemployment rate in India is the dearth of suitable employment alternatives. Although the Indian economy has been expanding quickly, employment creation has not kept up with the rate of economic expansion. As a result, there are now not enough jobs available to satisfy the demand for employment.

The slow pace of economic reforms is one of the main causes of the lack of employment creation. India’s economy is nevertheless hampered by extensive regulation, cumbersome red tape, and antiquated labour laws despite recent significant progress. These factors deter investment and make it challenging for enterprises to run and employ people.

2. Skills Mismatch

The skills mismatch is another important reason causing the unemployment rate in India. The skills and qualifications needed by the contemporary labour market are lacking in a substantial section of the Indian workforce. Because of this, it is challenging for them to obtain career prospects in expanding industries.

The manufacturing and service sectors, which are essential to the nation’s job growth, are characterized by a particularly severe lack of complementary skills. Technical personnel with abilities in electronics, welding, and machining are needed in the manufacturing industry, but there is a dearth of them in India. Similar to the IT industry, the services industry—which encompasses industries like finance, hospitality, and finance—needs individuals with particular abilities like programming, accounting, and customer service. In India, there aren’t enough people with these skills, though.

The Indian government has started the Skill India project, which intends to give training and skill development to the Indian workforce, to solve the skills gap. Programs like the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), which offers training to youth who are unemployed or underemployed in a variety of sectors, and the National Apprenticeship Promotion Scheme (NAPS), which offers apprenticeship training to youth in a variety of industries, are included in the initiative.

3. Informal Sector

Large portions of the Indian labour are employed in the informal sector, which is largely unregulated and devoid of fundamental protections like minimum salaries and social security benefits. This might result in long-term unemployment and makes it difficult for workers in the informal economy to make a living wage.

The lack of fundamental safeguards for workers in the unorganized sector presents a serious problem for the Indian government. While the government has started a number of programmes to address this issue, such as the National Rural Employment Guarantee Act (NREGA), which guarantees rural households at least 100 days of wage employment, more needs to be done to offer workers in the informal sector the fundamental protections they need.

Current State of Unemployment rate in India

The COVID-19 pandemic has had a major effect on the employment situation and economy in India. Lockdowns brought on by the epidemic caused numerous employment losses, particularly in the unorganized sector. But since then, things have substantially changed, and the Indian economy is now gradually recovering.

The government has started a number of programmes to increase employment in the nation. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the government’s flagship programme, offers rural households a minimum of 100 days of guaranteed paid work. Millions of rural households now have access to jobs thanks in large part to this programme.

The government has also started the Skill India initiative to train and grow the workforce in India. This programme aims to increase workers’ employability by providing them with the skills needed by the contemporary job market.

The generation of jobs in India has also been greatly aided by the private sector. Many businesses’ investments in the Indian market have resulted in the creation of numerous job opportunities.


In conclusion, Although India’s unemployment rate is still high, there are reasons for optimism. The government has started a number of programmes to increase employment, and the business sector is also doing its part. To address the underlying problems that the nation’s unemployment is a result of, however, much more work must be done. In order to give employees fundamental safeguards, the skills gap needs to be bridged and the informal sector needs to be controlled. India can tackle the problem of unemployment and build a more wealthy and just society with consistent efforts from all stakeholders.